General Instructions for Forms 1099, 1098, 5498, and W-2G

Transcription

1 2008 General Instructions for Forms 1099, 1098, 5498, and W-2G Department of the Treasury Internal Revenue Service Section references are to the Internal Revenue Code unless otherwise noted. Contents Page Reminders...1 What s New...1 Items You Should Note...2 A. Who Must File...3 B. Other Information Returns... 4 C. When To File...4 D. Where To File...4 E. Filing Returns With the IRS...5 F. Electronic Reporting... 5 G. Paper Document Reporting... 6 H. Corrected Returns on Paper Forms...6 Filing Corrected Returns on Paper Forms...7 I. Void Returns...8 J. Recipient Names and Taxpayer Identification Numbers (TINs)...8 K. Filer s Name, Identification Number, and Address L. Account Number Box on Forms...9 M. Statements to Recipients (Borrowers, Debtors, Donors, Insureds, etc.)... 9 N. Backup Withholding O. Penalties P. Payments to Corporations and Partnerships Q. Earnings on any IRA, Coverdell ESA, Archer MSA, or HSA R. Certain Grantor Trusts S. Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form T. How To Get Tax Help Guide to Information Returns Types of Payments Reminders Electronic Filing. E-filers are reminded that using the FIRE system requires following the specifications contained in Pub. 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically. Also, the IRS does not provide a fill-in form option. See part F on page 5 for information on e-file. Payee. Throughout these instructions the term payee means any recipient of Forms 1099, 1098, 5498, or W-2G including borrowers, debtors, donors, insureds, participants, policyholders, students, transferors, and winners on certain forms. Where to file. All information returns filed on paper will be filed with only two Internal Revenue Service Centers: Austin, TX, and Kansas City, MO. See part D on page 4 and Form 1096, Annual Summary and Transmittal of U.S. Information Returns. What s New See the specific form instructions for more information TIP on the changes listed below. General Instructions for Forms 1099, 1098, 5498, and W-2G. Where to file. All information returns filed on paper must use a 3-line mailing address. See part D on page 4. Use of magnetic media. All references to magnetic media have been removed from these instructions, all specific instructions, and forms to which these instructions refer. Enterprise Computing Center Martinsburg (ECC MTB) will no longer accept tape cartridges for returns filed after December 1, After that date, electronic filing will be the only acceptable method for filing information returns with ECC MTB. See part F on page 5. Instructions for Form The Mortgage Forgiveness Debt Relief Act of 2007 extended the requirement to report in box 4 qualified mortgage insurance premiums paid by the borrower through December 31, Instructions for Form 1098-C. Do not file Form 1098-C at the Internal Revenue Service Center at Ogden, UT, after December 31, All forms filed after December 31, 2007, should be filed at either the Austin, TX, center or the Kansas City, MO, center, depending on the location of your principal business, office, agency, or legal residence. See part D on page 4. Instructions for Forms 1099-A and 1099-C. Form 1099-C is not to be filed when fraudulent debt is cancelled due to identity theft and the debtor is not liable for the debt. Form 1099-C is to be used only for cancellations of debts for which the debtor is personally liable. Form 1099-CAP. We have removed the box 6 checkbox from Form 1099-CAP. Under Regulations section 1.367(a)-3 nonrecognition of losses is required for all reportable transactions from corporate inversions, making the checkbox unnecessary. Instructions for Form 1099-CAP. A TIP has been added under Who Must File to inform brokers of the sources of readily available public information for use in determining the broker s filing requirement. The instructions for box 6 have been removed. Form 1099-DIV. Box 7 may be blank as RICs no longer have to report this information to recipients. Instructions for Form 1099-DIV. The capital gains rate for qualified dividends has generally been reduced to zero after December 31, 2007, for individuals whose other income is taxed at the 10% or 15% rate. RICs meeting the requirements under final Regulations section have new reporting requirements for boxes 6 and 7. Instructions for Form 1099-MISC. Revenue Ruling provides that payments made by the U.S. Department of Veterans Affairs under the compensated work therapy program are exempt from federal income tax as veterans benefits and are no longer required to be reported on Form 1099-MISC. Instructions for Form 1099-PATR. The Caution for box 6 has been revised to reflect the allowance under new final Regulations section The allowance of the deduction at the entity level changes the tax treatment of the cooperative s deduction under section Section 8211(a) of the U.S. Troop Readiness, Veterans Care, Katrina Recovery, and Iraq Accountability Act extended the work opportunity credit through August 31, In the instructions for Box 10. Other Credits and Deductions, the reference to Form 8861, Welfare-To-Work Credit, has been deleted from the list of pass-through credits due to its repeal as a separate credit. Instead, qualified second-year wages are reported on Form 5884, Work Opportunity Credit. Also, the Cat. No F

2 reference to Form 5884-A, Employee Retention Credit, which Instructions for Forms W-2G and 5754 expired after 2006, has been deleted. Instructions for Form 1098 Instructions for Forms 1099-R and Instructions for Form 1098-C Instructions for Forms 1098-E and 1098-T Form 1099-R. Instructions for Forms 1099-A and 1099-C A reference to the reporting requirements for eligible Instructions for Form 1099-B charitable distributions under section 408(d)(8) has been Instructions for Form 1099-CAP deleted due to expiration of the provision. Instructions for Form 1099-DIV Permissible withdrawals from eligible automatic contribution Instructions for Form 1099-G arrangements have been added to the list of distributions that Instructions for Form 1099-H are not eligible rollover distributions. Specific reporting Instructions for Forms 1099-INT and 1099-OID instructions for these permissible withdrawals have been added Instructions for Form 1099-LTC under Permissible Withdrawals under Section 414(w). Instructions for Form 1099-MISC Reporting instructions for qualified rollover contributions as Instructions for Form 1099-PATR defined in section 408A(e) have been added under Reporting a Instructions for Form 1099-Q direct rollover. Instructions for Forms 1099-R and 5498 A Caution has been added to the instructions for box 2a to Instructions for Form 1099-S notify filers to disregard the amount which may be excludible Instructions for Forms 1099-SA and 5498-SA under section 402(l) as a distribution of payments for qualified Instructions for Form 5498-ESA health and long-term care insurance premiums for retired public safety officers when computing the taxable amount in box 2a. See How To Get Forms, Publications, and Other Assistance Instructions for withholding on nonqualified distributions from on page 15. designated Roth accounts have been added under Eligible rollover distribution; 20% withholding. Guide to Information Returns The following changes were made to the Guide to See the chart on pages 17 and 18 for a brief summary of Distribution Codes. information return reporting rules. 1. For Distribution Code 1, reference to the qualified reservist distribution under section 72(t)(2)(G) has been deleted Use Form 1096 To Send Paper Forms to the IRS due to expiration of the provision. You must send Copies A of all paper Forms 1099, 1098, 5498, 2. An exception was added to Distribution Code 2 for and W-2G to the IRS with Form 1096, Annual Summary and distributions that are permissible withdrawals under an eligible Transmittal of U.S. Information Returns. Instructions for automatic contribution arrangement under section 414(w). completing Form 1096 are contained on Form Also see 3. New Distribution Code H, Direct rollover of a designated part E on page 5. Roth account distribution to a Roth IRA, has been added. 4. Distribution Codes B and D are a valid combination Reporting Backup Withholding on Forms 1099 for and W-2G Form If you backup withhold on a payment, you must file the A section has been added to direct filers to the IRS website appropriate Form 1099 or Form W-2G with the IRS and furnish for information on disaster relief available for presidentially a statement to the recipient to report the amount of the declared disaster areas. payment and the amount withheld. This applies even though Somalia has been added to the list of locations in the the amount of the payment may be below the normal threshold designated combat zone for Enduring Freedom. for filing Form 1099 or Form W-2G. For how to report backup Instructions have been added for the reporting of qualified withholding, see part N on page 11. rollover contributions to Roth IRAs in box 2. Substitute Statements to Recipients Instructions for Forms W-2G and If you are using a substitute form to furnish statements to Rev. Proc informs sponsors of poker tournaments, recipients (generally Copy B), be sure your substitute including casinos, that payments of winnings of more than statements comply with the rules in Pub. 1179, General Rules $5,000 are subject to the rules for regular gambling withholding and Specifications for Substitute Forms 1096, 1098, 1099, and information reporting under section 3402(q) and its 5498, W-2G, and 1042-S. Pub. 1179, which is revised annually, regulations for payments made on or after March 4, explains the requirements for format and content of substitute Instructions for box 9 have been added informing issuers of statements to recipients. If you are using a substitute form to the requirement to complete box 9 with the TIN of the person furnish information to recipients, it must comply with the receiving the winnings. Failure to supply a correct TIN (SSN or requirements in Pub See part M on page 9 for additional ITIN) will result in backup withholding on the winnings. information. Instructions for boxes 11 and 12 have been clarified to inform issuers (other than state lotteries) of the need to obtain 2 forms All substitute statements to recipients must contain of identification from the person receiving the winnings as a! the tax year, form number, and form name prominently means of verifying the recipient s SSN/ITIN, name, and CAUTION displayed together in one area of the statement. For address. example, they could be shown in the upper right part of the statement. Items You Should Note Taxpayer Identification Number (TIN) Matching Photographs of Missing Children TIN Matching allows a payer or authorized agent who is required to file Forms 1099-B, DIV, INT, MISC, OID, and/or The Internal Revenue Service is a proud partner with the PATR, which report income subject to backup withholding, to National Center for Missing and Exploited Children. match TIN and name combinations with IRS records before Photographs of missing children selected by the Center may submitting the forms to the IRS. TIN Matching is one of the appear in instructions on pages that would otherwise be blank. e-services products that is offered and is accessible through the You can help bring these children home by looking at the IRS website. For program guidelines, see Pub. 2108A, photographs and calling THE-LOST( ) if e-services On-Line TIN Matching Program, or go to you recognize a child. gov and enter keyword TIN matching in the upper right corner. Available Products It is anticipated that payers who validate the TIN and name combinations before filing information returns will receive fewer In addition to these general instructions, which contain general backup withholding (CP2100) B notices and penalty notices. information concerning Forms 1099, 1098, 5498, and W-2G, we E-services technical support is available by calling provide specific form instructions as separate products. Get the , Monday through Friday, from 6:30 a.m. to 6:00 instructions you need for completing a specific form from the p.m., Central time. following list of separate instructions. -2-

3 predecessor s transactions and each of its own transactions on A. Who Must File each Form 1099-B. The successor may include with the form See the separate specific instructions for each form. sent to the recipient additional information explaining the combined reporting. Nominee/middleman returns. Generally, if you receive a Form 1099 for amounts that actually belong to another person, For purposes of the combined reporting procedure, the you are considered a nominee recipient. You must file a Form sharing of TINs and other information obtained under section 1099 with the IRS (the same type of Form 1099 you received) 3406 for information reporting and backup withholding purposes for each of the other owners showing the amounts allocable to does not violate the confidentiality rules in section 3406(f). each. You must also furnish a Form 1099 to each of the other Statement required. The successor must file a statement owners. File the new Form 1099 with Form 1096 with the with the IRS indicating the forms that are being filed on a Internal Revenue Service Center for your area. On each new combined basis under Rev. Proc The statement must: Form 1099, list yourself as the payer and the other owner as 1. Include the predecessor s and successor s names, the recipient. On Form 1096, list yourself as the filer. A addresses, telephone numbers, EINs, and the name and husband or wife is not required to file a nominee return to show telephone number of the person responsible for preparing the amounts owned by the other. The nominee, not the original statement. payer, is responsible for filing the subsequent Forms 1099 to 2. Reflect separately the amount of federal income tax show the amount allocable to each owner. withheld by the predecessor and by the successor for each type Successor/predecessor reporting. A successor business (a of form being filed on a combined basis (for example, Form corporation, partnership, or sole proprietorship) and a 1099-R or 1099-MISC). predecessor business (a corporation, partnership, or sole 3. Be sent separately from Forms 1099, 1098, 5498, and proprietorship) may agree that the successor will assume all or W-2G by the forms due date to: Enterprise Computing some of the predecessor s information reporting responsibilities. Center Martinsburg, Attn: Chief, Information Returns Branch, This would permit the successor to file one Form 1099, 1098, Mail Stop 360, 230 Murall Dr., Kearneysville, WV Do not 5498, or W-2G for each recipient combining the predecessor s send Form 1042-S statements to this address. Instead, use the and successor s reportable amounts, including any withholding. address given in the Instructions for Form 1042-S; see If they so agree and the successor satisfies the predecessor s Rev. Proc obligations and the conditions described below, the Qualified settlement funds. A qualified settlement fund must predecessor does not have to file the specified information file information returns for distributions to claimants if any returns for the acquisition year. If the successor and transferor to the fund would have been required to file if the predecessor do not agree, or if the requirements described are transferor had made the distributions directly to the claimants. not met, the predecessor and the successor each must file Forms 1099, 1098, 5498, and W-2G for their own reportable For distributions to transferors, a fund is subject to the amounts as they usually would. For more information and the information reporting requirements of sections 6041 and 6041A rules that apply to filing combined Forms 1042-S, Foreign and may be required to file Form 1099-MISC. For payments Person s U.S. Income Subject to Withholding, see Rev. Proc. made by the fund on behalf of a claimant or transferor, the fund 99-50, which is available on page 757 of Internal Revenue is subject to these same rules and may have to file Form Bulletin at MISC for the payment to a third party. For information reporting purposes, a payment made by the fund on behalf of a The combined reporting procedure is available when all the claimant or transferor is considered a distribution to the following conditions are met. claimant or transferor and is also subject to information 1. The successor acquires from the predecessor reporting requirements. substantially all the property (a) used in the trade or business of The same filing requirements, exceptions, and thresholds the predecessor, including when one or more corporations are may apply to qualified settlement funds as apply to any other absorbed by another corporation under a merger agreement, or payer. That is, the fund must determine the character of the (b) used in a separate unit of a trade or business of the payment (for example, interest, fixed and determinable income, predecessor. or gross proceeds from broker transactions) and to whom the 2. The predecessor is required to report amounts, including payment is made (for example, corporation or individual). any withholding, on information returns for the year of acquisition for the period before the acquisition. For more information, see Regulations section 1.468B-2(l). 3. The predecessor is not required to report amounts, Also, see Treasury Decision (TD) 9429 available on page 546 including withholding, on information returns for the year of of Internal Revenue Bulletin at acquisition for the period after the acquisition. irs-irbs/irb06-10.pdf. TD 9249 relates to escrow and similar funds. Combined reporting agreement. The predecessor and Payments to foreign persons. See the Instructions for Form the successor must agree on the specific forms to which the 1042-S, relating to U.S. source income of foreign persons, for combined reporting procedure applies and that the successor reporting requirements relating to payments to foreign persons. assumes the predecessor s entire information reporting Widely held fixed investment trusts (WHFITs). Trustees and obligations for these forms. The predecessor and successor middlemen of WHFITs are required to report all items of gross may agree to: income and proceeds on the appropriate Form For the 1. Use the combined reporting procedure for all Forms definition of a WHFIT, see Regulations section (b)(22). 1099, 1098, 5498, and W-2G, or A tax information statement that includes the information 2. Limit the use of the combined reporting procedure to (a) provided to the IRS on Forms 1099, as well as additional specific forms or (b) specific reporting entities, including any information identified in Regulations section (e) must be unit, branch, or location within a particular business entity that furnished to trust interest holders (TIHs). files its own separate information returns. For example, if the predecessor s and successor s only compatible computer or Items of gross income (including OID) attributable to the TIH recordkeeping systems are their dividends paid ledgers, they for the calendar year including all amounts of income may agree to use the combined reporting procedure for Forms attributable to selling, purchasing, or redeeming of a trust 1099-DIV only. Similarly, if the only compatible systems are in holder s interest in the WHFIT must be reported. Items of their midwest branches, they may agree to use the combined income that are required to be reported include non pro-rata reporting procedure for only the midwest branches. partial principal payments, trust sales proceeds, redemption asset proceeds, and sales of a trust interest on a secondary Combined reporting procedure. On each Form 1099, market must be reported on Form 1099-B. See Regulations 1098, 5498, and W-2G filed by the successor, the successor section (d). must combine the predecessor s (before the acquisition) and Safe harbor rules for determining the amount of an item to successor s reportable amounts, including any withholding, for be reported on Form 1099 and a tax information statement with the acquisition year and report the aggregate. For transactional respect to a TIH in a non-mortgage WHFIT (NMWHFIT) and a reporting on Form 1099-B, Proceeds From Broker and Barter widely held mortgage trust (WHMT) are found in Regulations Exchange Transactions, the successor must report each of the sections (f) and (g) respectively. -3-

4 Trustees and middlemen must follow all the rules for filing Private delivery services cannot deliver items to P.O. Forms 1099 with the IRS and furnishing a statement to the TIH! boxes. You must use the U.S. Postal Service to mail any (except as noted below) as described in parts A through S of CAUTION item to an IRS P.O. box address. these instructions. Trustees and middlemen should also follow the separate instructions for Forms 1099-B, 1099-DIV, Reporting period. Forms 1098, 1099, and W-2G are used to 1099-INT, 1099-MISC, and 1099-OID, as applicable, which may report amounts received, paid, credited, donated, or canceled in address additional income reporting requirements. the case of Form 1099-C during the calendar year. Forms 5498, 5498-ESA, and 5498-SA are used to report amounts Due date exception and other requirements for contributed and the fair market value of an account for the furnishing statement to TIH. The written tax information for calendar year furnished to the TIH is due on or before March 16, Extension. You can get an automatic 30-day extension of time For other items of expense and credit that must be reported to to file by completing Form 8809, Application for Extension of the TIH, see Regulations section (c). Time To File Information Returns. The form may be submitted There is no reporting requirement if the TIH is an exempt on paper, or through the FIRE system either as a fill-in form or recipient unless the trustee or middleman backup withholds an electronic file. No signature or explanation is required for the under section If the trustee or middleman backup extension. However, you must file Form 8809 by the due date withholds, then follow the rules in part N on page 11. An exempt of the returns in order to get the 30-day extension. Under recipient for this purpose is defined in Regulations section certain hardship conditions you may apply for an additional (b)(7). 30-day extension. See the instructions for Form 8809 for more information. Reporting to foreign persons. Items of a WHFIT attributable to a TIH who is not a U.S. person must be reported How to apply. As soon as you know that a 30-day and amounts withheld following the provisions of sections 1441 extension of time to file is needed, file Form through See Form 1042-S and its separate instructions If you are requesting an extension for 50 or fewer filers, for more information. follow the instructions on Form 8809 and mail it to the address listed in the instructions on the form. See the instructions for Form 8809 for more information. If you are requesting an extension for more than 50 filers, you B. Other Information Returns must submit the extension request online or electronically. You The income information you report on the following forms must are encouraged to submit requests for 10 to 50 filers online or not be repeated on Forms 1099 or W-2G. electronically. See Pub. 1220, Part E, for more information on Form W-2, Wage and Tax Statement, reporting wages and filing online or electronically. other employee compensation. Extension for statements to recipients. For information Forms 1042-S and 1000 reporting income to foreign persons. on requesting an extension of time to file statements to Form 2439 reporting undistributed long-term capital gains of recipients, see Extension on page 11. a regulated investment company or real estate investment trust. Schedule K-1 of Form 1065 or 1065-B reporting distributive shares to members of a partnership. D. Where To File Schedule K-1 of Form 1041 reporting distributions to beneficiaries of trusts or estates. Use the new 3-line address for your state found below Schedule K-1 of Form 1120S reporting distributive shares to! for mailing information returns. shareholders of S corporations. CAUTION Schedule K of Form 1120-IC-DISC reporting actual and constructive distributions to shareholders and deferred DISC Send all information returns filed on paper to the following: income. Schedule Q of Form 1066 reporting income from a REMIC to If your principal business, a residual interest holder. office or agency, or legal Use the following address residence in the case of an individual, is located in C. When To File File Forms 1098, 1099, or W-2G on paper by March 2, 2009, or March 31, 2009, if filing electronically. Also file Form 1096 with Alabama, Arizona, Arkansas, paper forms. Brokers may file Forms 1096 and 1099-B anytime Connecticut, Delaware, Florida, after the reporting period they elect to adopt (month, quarter, or Georgia, Kentucky, Louisiana, year), but not later than the due date. File Form 1096 with Maine, Massachusetts, Department of the Treasury Forms 5498, 5498-ESA, and 5498-SA by June 1, Mississippi, New Hampshire, Internal Revenue Service Center New Jersey, New Mexico, New You will meet the requirement to file if the form is properly Austin, TX York, North Carolina, Ohio, addressed and mailed on or before the due date. If the regular Pennsylvania, Rhode Island, due date falls on a Saturday, Sunday, or legal holiday, file by Texas, Vermont, Virginia, West the next business day. A business day is any day that is not a Virginia Saturday, Sunday, or legal holiday. See part M on page 9 about providing Forms 1098, 1099, 5498, and W-2G or statements Alaska, California, Colorado, to recipients. District of Columbia, Hawaii, Private delivery services. You can use certain private Idaho, Illinois, Indiana, Iowa, delivery services designated by the IRS to meet the timely Kansas, Maryland, Michigan, Department of the Treasury mailing as timely filing rule for information returns. The list Minnesota, Missouri, Montana, Internal Revenue Service Center includes only the following. Nebraska, Nevada, North Kansas City, MO DHL Worldwide Express (DHL): DHL Same Day Service; Dakota, Oklahoma, Oregon, DHL Next Day 10:30 AM; DHL Next Day 12:00 PM; DHL Next South Carolina, South Dakota, Day 3:00 PM; and DHL 2nd Day Service. Tennessee, Utah, Washington, Federal Express (FedEx): FedEx Priority Overnight, FedEx Wisconsin, Wyoming Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First. If your legal residence or principal place of business or United Parcel Service (UPS): UPS Next Day Air, UPS Next principal office or agency is outside the United States, file with Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS the Department of the Treasury, Internal Revenue Service Worldwide Express Plus, and UPS Worldwide Express. Center, Austin, TX The private delivery service can tell you how to get written State and local tax departments. Contact the applicable proof of the mailing date. state and local tax department as necessary for reporting -4-

5 requirements and where to file Copy 1 (Forms 1099-MISC and You can file electronically through the Filing Information 1099-R). Generally, the state or local tax department you need Returns Electronically System (FIRE System); however, to contact will be located in the recipient s state of you must have software that can produce a file in the legal residence. proper format according to Pub The FIRE System does not provide a fill-in form option. The FIRE System operates 24 hours a day, 7 days a week. You may access the FIRE System E. Filing Returns With the IRS via the Internet at See Pub for The IRS strongly encourages the quality review of data before more information. filing to prevent erroneous notices from being mailed to payees Due dates. File Forms 1098, 1099, or W-2G electronically (or others for whom information is being reported). through the FIRE System by March 31, File Form 5498, If you must file any Form 1098, 1099, 5498, or W-2G with 5498-ESA, or 5498-SA by June 1, See part M on page 9 the IRS and you are filing paper forms, you must send a Form about providing Forms 1098, 1099, 5498, and W-2G or 1096 with each type of form as the transmittal document. You statements to recipients. must group the forms by form number and submit each group Extension of time to file. For information about requesting an with a separate Form For example, if you file Forms extension of time to file, see Extension on page , 1099-A, and 1099-MISC, complete one Form 1096 to transmit Forms 1098, another for Forms 1099-A, and a third for If you file electronically, do not file the same returns on Forms 1099-MISC. Specific instructions for completing Form! paper are included on the form. Also, see Transmitters, paying CAUTION agents, etc. below. For information about filing corrected Who must file electronically. If you are required to file 250 or returns, see part H on page 6. more information returns, you must file electronically. The See Pub for specifications for private printing of 250-or-more requirement applies separately to each type of substitute information returns. You may not request special form. For example, if you must file 500 Forms 1098 and 100 consideration. Only forms that conform with the official form and Forms 1099-A, you must file Forms 1098 electronically, but you the specifications in Pub are acceptable for filing with are not required to file Forms 1099-A electronically. the IRS. The electronic filing requirement does not apply if you apply Transmitters, paying agents, etc. A transmitter, service for and receive a hardship waiver. See How to request a waiver bureau, paying agent, or disbursing agent (hereafter referred to from filing electronically below. as agent ) may sign Form 1096 on behalf of any person required to file (hereafter referred to as payer ) if the conditions The IRS encourages you to file electronically even in 1 and 2 below are met. TIP though you are filing fewer than 250 returns. 1. The agent has the authority to sign the form under an agency agreement (oral, written, or implied) that is valid under Filing requirement applies separately to originals and state law and corrections. The electronic filing requirements apply 2. The agent signs the form and adds the caption For: separately to original returns and corrected returns. Originals (Name of payer). and corrections are not aggregated to determine whether you are required to file electronically. For example, if you file 400 Signing of the form by an authorized agent on behalf of the Forms 1098 electronically and you are making 75 corrections, payer does not relieve the payer of the liability for penalties for your corrections can be filed on paper because the number of not filing a correct, complete, and timely Form 1096 and corrections for Form 1098 is less than the 250 filing accompanying returns. requirement. However, if you were filing 250 or more Form Forms 1098, 1099, 5498, W-2G, or acceptable substitute 1098 corrections, they would have to be filed electronically. statements to recipients issued by a service bureau or agent Reporting incorrect payer name and/or TIN. If a payer should show the same payer s name as shown on the discovers an error in reporting the payer name and/or TIN, write information returns filed with the IRS. a letter to IRS/ECC MTB (see below) containing the: For information about the election to report and deposit 1. Name and address of the payer, backup withholding under the agent s TIN and how to prepare 2. Type of error (including the incorrect payer name/tin that forms if the election is made, see Rev. Proc , was reported), C.B. 502 and the Instructions for Form Tax year, Keeping copies. Generally, keep copies of information returns 4. Payer TIN, you filed with the IRS or have the ability to reconstruct the data 5. Transmitter Control Code (TCC), if applicable, for at least 3 years, 4 years for Form 1099-C, from the due date 6. Type of return, of the returns. Keep copies of information returns for 4 years if 7. Number of payees, and backup withholding was imposed. 8. Filing method (paper or electronic). Shipping and mailing. Send the forms to the IRS in a flat Send the letter to Enterprise Computing Center Martinsburg, mailing (not folded). If you are sending many forms, you may Information Reporting Program, 240 Murall Drive, send them in conveniently sized packages. On each package, Kearneysville, WV Also see Pub. 1220, Part A, write your name, number the packages consecutively, and Section place Form 1096 in package number one. Postal regulations require forms and packages to be sent by First-Class Mail. If a payer realizes duplicate reporting or a large percentage of incorrect information has been filed, contact the information reporting customer service site at for further instructions. F. Electronic Reporting Electronic reporting may be required for filing all information How to get approval to file electronically. File Form 4419, returns discussed in these instructions (see Who must file Application for Filing Information Returns Electronically, at least electronically on this page). Different types of payments, such 30 days before the due date of the returns. File Form 4419 for as interest, dividends, and rents, may be reported in the same all types of returns that will be filed electronically. See Form submission for more information. Once you have received approval, you need not reapply each year. The IRS will provide a written For returns filed after December 1, 2008, Enterprise reply to the applicant and further instructions at the time of! Computing Center Martinsburg (ECC MTB) will no approval, usually within 30 days. CAUTION longer accept tape cartridges. Electronic filing will be the How to request a waiver from filing electronically. To only acceptable method for filing information returns with receive a waiver from the required filing of information returns ECC MTB. electronically, submit Form 8508, Request for Waiver From Pub provides the procedures for reporting Filing Information Returns Electronically, at least 45 days before electronically and is updated annually. Pub is available the due date of the returns. You cannot apply for a waiver for on the IRS website at more than 1 tax year at a time. If you need a waiver for more -5-

6 than 1 tax year, you must reapply at the appropriate time each year. If a waiver for original returns is approved, any corrections for the same types of returns will be covered under the waiver. However, if you submit original returns electronically but you want to submit your corrections on paper, a waiver must be approved for the corrections if you must file 250 or more corrections. If you receive an approved waiver, do not send a copy of it to the service center where you file your paper returns. Keep the waiver for your records only. Penalty. If you are required to file electronically but fail to do so, and you do not have an approved waiver, you may be subject to a penalty of $50 per return for failure to file electronically unless you establish reasonable cause. However, you can file up to 250 returns on paper; those returns will not be subject to a penalty for failure to file electronically. The penalty applies separately to original returns and corrected returns. See Filing requirement applies separately to originals and corrections on page 5. G. Paper Document Reporting corrections. See part H below. current year. Because forms are scanned, you must use the current year form to report current year information. 9. Use the official forms or substitute forms that meet the specifications in Pub If you submit substitute forms that do not meet the current specifications and that are not scannable, you may be subject to a penalty of $50 for each return for improper format. 10. Do not use dollar signs ($) (they are preprinted on the forms), ampersands (&), asterisks (*), commas (,), or other special characters in money amount boxes. 11. Do not use apostrophes ( ), asterisks (*), or other special characters on the payee name line. Suggested format. Follow these suggestions. 1. Although handwritten forms are acceptable, the IRS prefers that you type or machine print data entries using 10 pitch (pica) or 12 pitch (elite) black type. Use block print, not script characters. Insert data in the middle of the blocks well separated from other printing and guidelines, and take other measures to guarantee a dark black, clear, sharp image. 2. Do not enter 0 (zero) or None in money amount boxes when no entry is required. Leave the boxes blank unless the instructions specifically require that you enter a 0 (zero). For example, in some cases, you must enter 0 (zero) to make If you are required to file 250 or more information returns, see 3. Do not enter number signs (#) RT 2, not Rt. #2. part F on page 5. Common errors. Be sure to check your returns to prevent the following common errors. H. Corrected Returns on Paper Forms 1. Duplicate filing. Do not send the same information to the IRS more than once. Also see Multiple filings below. To file corrections for electronically filed forms, see part 2. Filer s name, address, and TIN are not the same on Form! F on page 5 and Pub and the attached Forms 1099, 1098, 5498, or W-2G. CAUTION 3. Decimal point to show dollars and cents omitted. For example, is correct, not If you filed a return with the IRS and later discover you made 4. Two or more types of returns submitted with one Form an error on it, you must: 1096 (for example, Forms 1099-INT and 1099-MISC with one Correct it as soon as possible and file Copy A and Form 1096 Form 1096). You must submit a separate Form 1096 with each with your Internal Revenue Service Center (see part D on type of return. page 4). Furnish statements to recipients showing the correction. Multiple filings. If, after you file Forms 1099, 1098, 5498, or When making a correction, complete all information (see W-2G, you discover additional forms that are required to be Filing Corrected Returns on Paper Forms on page 7). filed, file these forms with a new Form Do not include Do not cut or separate forms that are two or three to a page. copies or information from previously filed returns. Submit the entire page even if only one of the forms on the Required format. Because paper forms are scanned, all page is completed. Forms 1096 and Copies A of Forms 1098, 1099, and 5498 must Do not staple the forms to Form be prepared in accordance with the following instructions. If Do not send corrected returns to the IRS if you are correcting these instructions are not followed, you may be subject to a state or local information only. Contact the state or local tax penalty of $50 for each incorrectly filed document. department for help with this type of correction. 1. Do not cut or separate Copies A of the forms that are To correct payer information, see Reporting incorrect payer printed two or three to a sheet (except Forms W-2G and name and/or TIN on page C). Generally, Forms 1098, 1099, and 5498 are printed Form Use a separate Form 1096 for each type of return two or three to an 8 x 11 inch sheet. Form 1096 is printed one you are correcting. For the same type of return, you may use to an 8 x 11 inch sheet. These forms must be submitted to the one Form 1096 for both originals and corrections. You do not IRS on the 8 x 11 inch sheet. If at least one form on the page is need to correct a previously filed Form correctly completed, you must submit the entire page. Forms W-2G may be separated and submitted as single forms. Send CORRECTED checkbox. Enter an X in the corrected the forms to the IRS in a flat mailing (not folded). checkbox only when correcting a form previously filed with the 2. No photocopies of any forms are acceptable. See How IRS or furnished to the recipient. Certain errors require two To Get Forms, Publications, and Other Assistance on page 15. returns to make the correction. See Filing Corrected Returns on 3. Do not staple, tear, or tape any of these forms. It will Paper Forms on page 7 to determine when to mark the interfere with the IRS s ability to scan the documents. CORRECTED checkbox. 4. Pinfeed holes on the form are not acceptable. Pinfeed Account number. If the account number was provided on the strips outside the 8 x 11 inch area must be removed before original return, the same account number must be included on submission, without tearing or ripping the form. Substitute forms both the original and corrected returns to properly identify and prepared in continuous or strip form must be burst and stripped process the correction. If the account number was not provided to conform to the size specified for a single sheet (8 x 11 on the original return, do not include it on the corrected return. inches) before they are filed with the IRS. See part L on page Do not change the title of any box on any form. Do not use a form to report information that is not properly reportable Recipient s statement. You may enter a date next to the on that form. If you are unsure of where to report the data, call CORRECTED checkbox. This will help the recipient in the the information reporting call site at (toll free). case of multiple corrections. 6. Report information only in the appropriate boxes provided Filing corrected returns on paper forms. The error charts on on the forms. Make only one entry in each box unless otherwise page 7 give step-by-step instructions for filing corrected returns indicated in the form s specific instructions. for the most frequently made errors. They are grouped under 7. Do not submit any copy other than Copy A to the IRS. Error Type 1 or 2, based on how the correction is made. 8. Do not use prior year forms unless you are reporting prior Correction of errors may require the submission of more than year information; do not use subsequent year forms for the one return. Be sure to read and follow the steps given. -6-

7 Filing Corrected Returns on Paper Forms Identify the correction needed based on Error Type 1 or 2; then follow the steps to make the corrections and file the form(s). Also see Part H on page 6. Error Type 1 Incorrect money amount(s), code, or checkbox, or Incorrect address, or Incorrect payee name, or A return was filed when one should not have been filed. These errors require only one return to make the correction. Caution: If you must correct a TIN and/or a name and address, follow the instructions under Error 2. Correction A. Form 1098, 1099, 5498, or W-2G Prepare a new information return. Enter an X in the CORRECTED box (and date (optional)) at the top of the form. Correct any recipient information such as money amounts and address. Report other information as per original return. B. Form Prepare a new transmittal Form Provide all requested information on the form as it applies to Part A, 1 and File Form 1096 and Copy A of the return with the appropriate service center. 4. Do not include a copy of the original return that was filed incorrectly. Error Type 2 Correction No payee TIN (SSN, EIN, QI-EIN, or ITIN), or Incorrect payee TIN, or Incorrect name and address or Original return filed using wrong type of return (for example, a Form 1099-DIV was filed when a Form 1099-INT should have been filed). Two separate returns are required to make the correction properly. Follow all instructions for both Steps 1 and 2. Step 1. Identify incorrect return submitted. Step 2. Report correct information. 1. Prepare a new information return. 2. Enter an X in the CORRECTED box (and date (optional)) at the top of the form. 3. Enter the payer, recipient, and account number information exactly as it appeared on the original incorrect return; however, enter 0 (zero) for all money amounts. A. Form 1098, 1099, 5498, or W-2G 1. Prepare a new information return. 2. Do not enter an X in the CORRECTED box at the top of the form. Prepare the new return as though it is an original. 3. Include all the correct information on the form including the correct TIN, name, and address. B. Form Prepare a new transmittal Form Enter the words Filed To Correct TIN, Filed to Correct Name and Address, or Filed to Correct Return in the bottom margin of the form. Provide all requested information on the form as it applies to the returns prepared in Steps 1 and 2. File Form 1096 and Copy A of the return with the appropriate service center. Do not include a copy of the original return that was filed incorrectly. -7-

8 If you fail to file correct information returns or furnish a Requesting a recipient s TIN. If the recipient is a U.S.! correct payee statement, you may be subject to a person (including a U.S. resident alien), the IRS suggests that CAUTION penalty. See part O on page 12. Regulations section you request the recipient complete Form W-9, Request for (relating to information return penalties) does not Taxpayer Identification Number and Certification, or Form require you to file corrected returns for missing or incorrect TINs W-9S, Request for Student s or Borrower s Taxpayer if you meet the reasonable cause criteria. You are merely Identification Number and Certification, if appropriate. See the required to include the correct TIN on the next original return Instructions for the Requester of Form W-9 for more information you are required to file. However, if you do not meet the on how to request a TIN. reasonable cause criteria, a reduced penalty may be imposed if If the recipient is a foreign person, the IRS suggests that you the corrected returns are filed by August 1. request the recipient complete the appropriate Form W-8. See In addition, even if you meet the reasonable cause criteria, the Instructions for the Requester of Forms W-8BEN, W-8ECI, the IRS encourages you to file corrections for incorrect or W-8EXP, and W-8IMY. missing TINs so that the IRS can update the payees records.! CAUTION U.S. resident aliens who rely on a saving clause of a tax treaty are to complete Form W-9, not Form W-8BEN. See Pub. 515, Withholding of Tax on Nonresident Aliens I. Void Returns and Foreign Entities, and Pub. 519, U.S. Tax Guide for Aliens. An X in the VOID box at the top of the form will not correct a You may be subject to a penalty for an incorrect or missing previously filed return. See part H on page 6 for instructions for TIN on an information return. See part O on page 12. You are making corrections. required to maintain the confidentiality of information obtained VOID box. If a completed or partially completed Form 1098, on a Form W-9/W-9S relating to the taxpayer s identity 1099, or 5498 is incorrect and you want to void it before (including SSNs, EINs, and ITINs), and you may use such submission to the IRS, enter an X in the VOID box at the top information only to comply with the tax laws. of the form. For example, if you make an error while typing or If the recipient does not provide a TIN, leave the box for printing a form, you should void it. The return will then be TIP the recipient s TIN blank on the Form 1098, 1099, 5498, disregarded during processing by the IRS. Go to the next form or W-2G. Only one recipient TIN can be entered on the on the page, or to another page, and enter the correct form. Backup withholding may apply; see part N on page 11. information; but do not mark the CORRECTED box. Do not The TIN for individual recipients of information returns is the cut or separate the forms that are two or three to a page. SSN. See the information about sole proprietors on this page. Submit the entire page even if only one of the forms on the For other recipients, including corporations, partnerships, and page is a good return. estates, the TIN is the EIN. Income reportable after the death of an individual must reflect the TIN of the payee, that is, of the estate or of the surviving joint owner. For more information, see J. Recipient Names and Taxpayer Personal Representative in Pub. 559, Survivors, Executors, and Identification Numbers (TINs) Administrators. For LLCs, see the information on LLC on this page. Recipient name. Show the full name and address in the SSNs have nine digits separated by two hyphens section provided on the information return. If payments have ( ), and EINs have nine digits separated by only been made to more than one recipient or the account is in more one hyphen ( ). than one name, show on the first name line the name of the recipient whose TIN is first shown on the return. You may show Electronic submission of Forms W-9. Requesters may the names of any other individual recipients in the area below establish a system for payees and payees agents to submit the first line, if desired. Form W-2G filers, see the Instructions Forms W-9 electronically, including by fax. A requester is for Forms W-2G and anyone required to file an information return. A payee is anyone required to provide a TIN to the requester. Sole proprietors. You must show the individual s name on Payee s agent. A payee s agent can be an investment the first name line; on the second name line, you may enter the advisor (corporation, partnership, or individual) or an doing business as (DBA) name. You may not enter only the introducing broker. An investment advisor must be registered DBA name. For the TIN, enter either the individual s SSN or the with the Securities Exchange Commission (SEC) under the EIN of the business (sole proprietorship). The IRS prefers that Investment Advisers Act of The introducing broker is a you enter the SSN. broker-dealer that is regulated by the SEC and the National Limited liability company (LLC). For a single-member Association of Securities Dealers, Inc., and that is not a payer. LLC (including a foreign LLC with a U.S. owner) that is Except for a broker who acts as a payee s agent for readily disregarded as an entity separate from its owner under tradable instruments, the advisor or broker must show in Regulations section , enter the individual s name writing to the payer that the payee authorized the advisor or only on the first name line and the LLC s name on the second broker to transmit the Form W-9 to the payer. name line. For the TIN, enter the individual s SSN (or EIN, if Generally, the electronic system must: applicable). If the LLC is a corporation, partnership, etc., enter 1. Ensure the information received is the information sent the entity s EIN. and document all occasions of user access that result in the Bankruptcy estate. If an individual (the debtor) for whom submission. you are required to file an information return is in Chapter Make reasonably certain the person accessing the bankruptcy, and the debtor notified you of the bankruptcy system and submitting the form is the person identified on estate s EIN, report post-petition gross income, gross proceeds, Form W-9. or other reportable payments on the applicable information 3. Provide the same information as the paper Form W-9. return using the estate s name and EIN. The debtor should 4. Be able to supply a hard copy of the electronic Form W-9 notify you when the bankruptcy is closed, dismissed, or if the IRS requests it. converted, so that any subsequent information returns will be 5. Require as the final entry in the submission an electronic filed with the correct name and EIN. Different rules apply if the signature by the payee whose name is on Form W-9 that bankruptcy is converted to Chapter 7, 12, or 13 of the authenticates and verifies the submission. The electronic Bankruptcy Code. For additional guidance, see Notice signature must be under penalties of perjury and the perjury which is on page 596 of Internal Revenue Bulletin statement must contain the language of the paper Form W-9. available at TINs. TINs are used to associate and verify amounts you report to the IRS with corresponding amounts on tax returns. Therefore, it is important that you furnish correct names, social security numbers (SSNs), individual taxpayer identification numbers (ITINs), or employer identification numbers (EINs) for recipients on the forms sent to the IRS. -8- For Forms W-9 that are not required to be signed, the TIP electronic system need not provide for an electronic signature or a perjury statement. Additional requirements may apply. See Announcement that is available on page 30 of Internal Revenue Bulletin at and

9 Announcement , which is available on page 221 of Internal Revenue Bulletin at irb01-36.pdf. Electronic submission of Forms W-9S. See the Instructions for Forms 1098-E and 1098-T. K. Filer s Name, Identification Number, and Address The TIN for filers of information returns, including sole proprietors and nominees/middlemen, is the federal EIN. However, sole proprietors and nominees/middlemen who are not otherwise required to have an EIN should use their SSNs. A sole proprietor is not required to have an EIN unless he or she has a Keogh plan or must file excise or employment tax returns. See Pub. 583, Starting a Business and Keeping Records. The filer s name and TIN should be consistent with the name and TIN used on the filer s other tax returns. The name of the filer s paying agent or service bureau must not be used in place of the name of the filer. For a single-member LLC (including a foreign LLC with a U.S. owner) that is disregarded as an entity separate from its owner under Regulations section , enter the individual s name only on the first name line and the LLC s name on the second name line. For the TIN, enter the individual s SSN (or EIN, if applicable). If the LLC is a corporation, partnership, etc., enter the entity s EIN. If you do not have an EIN, you may apply for one online. Go to the IRS website and enter keyword online EIN in the upper right corner. You may also apply by calling or by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS. See the Instructions for Form SS-4 for more information. Enter your street address including the room, suite, or other unit number on the forms. Substitute statements. If you are not using the official IRS form to furnish statements to recipients, see Pub for specific rules about providing substitute statements to recipients. Generally, a substitute is any statement other than Copy B of the official form. You may develop them yourself or buy them from a private printer. However, the substitutes must comply with the format and content requirements specified in Pub that is available on the IRS website at Telephone number. You are required to include the telephone number of a person to contact on the following statements to recipients: W-2G, 1098, 1098-C, 1098-E, 1098-T, 1099-A, 1099-B, 1099-CAP, 1099-DIV, 1099-G (excluding state and local income tax refunds), 1099-H, 1099-INT, 1099-LTC, 1099-MISC (excluding fishing boat proceeds), 1099-OID, 1099-PATR, 1099-Q, and 1099-S. You may include the telephone number in any conspicuous place on the statements. This number must provide direct access to an individual who can answer questions about the statement. Although not required, if you report on other Forms 1099 and 5498, you are encouraged to furnish telephone numbers. Rules for furnishing statements. Different rules apply to furnishing statements to recipients depending on the type of payment (or other information) you are reporting and the form you are filing. If you are reporting a payment that includes noncash TIP property, show the fair market value of the property at the time of payment. Although, generally, you are not required to report payments smaller than the minimum described for a form, you may prefer, for economy and your own convenience, to file Copies A for all payments. The IRS encourages this. Report the type of payment information as described below for: (a) Dividend, interest, and royalty payments; (b) Real estate transactions; and (c) Other information. Dividend, interest, and royalty payments. For payments of dividends under section 6042 (reported on Form 1099-DIV), patronage dividends under section 6044 (reported on Form 1099-PATR), interest (including original issue discount and L. Account Number Box on Forms tax-exempt interest) under section 6049 (reported on Form Use the account number box, when provided, on Forms 1099, 1099-INT or 1099-OID), or royalties under section 6050N 1098, and 5498 for an account number designation. The (reported on Form 1099-MISC or 1099-S), you are required to account number is required if you have multiple accounts for a furnish an official IRS Form 1099 or an acceptable substitute recipient for whom you are filing more than one information Form 1099 to a recipient either in person, by First-Class Mail to return of the same type. Additionally, the IRS encourages you the recipient s last known address, or electronically (see to include the recipient s account number on paper forms if your Electronic recipient statements on page 10). Statements may system of records uses the account number rather than the be sent by intraoffice mail if you use intraoffice mail to send name or TIN for identification purposes. Also, the IRS will account information and other correspondence to the recipient. include the account number in future notices to you about backup withholding. See Pub if you are filing Statement mailing requirements for Forms 1099-DIV, electronically INT, 1099-OID, and 1099-PATR, and forms reporting royalties only. The following statement mailing requirements The account number may be a checking account number, apply only to Forms 1099-DIV (except for section 404(k) savings account number, serial number, or any other number dividends), 1099-INT (except for interest reportable in the you assign to the payee that is unique and will distinguish the course of your trade or business under section 6041), specific account. This number must not appear anywhere else 1099-OID, 1099-PATR, and timber royalties reported under on the form, and this box may not be used for any other item section 6050N (on Form 1099-MISC or 1099-S). The mailing unless the separate instructions indicate otherwise. Using must contain the official IRS Form 1099 or an acceptable unique account numbers ensures that corrected information substitute and may also contain the following enclosures: (a) returns will be processed accurately. Form W-2, applicable Form W-8, Form W-9, or other Forms If you are using window envelopes to mail statements to W-2G, 1098, 1099, and 5498 statements; (b) a check from the recipients and using reduced rate mail, be sure the account account being reported; (c) a letter explaining why no check is number does not appear in the window. The Postal Service enclosed; (d) a statement of the person s account shown on may not accept these for reduced rate mail. Forms 1099, 1098, or 5498; and (e) a letter explaining the tax consequences of the information shown on the recipient statement. M. Statements to Recipients (Borrowers, A statement of the person s account (year-end account Debtors, Donors, Insureds, Participants, Payers/Borrowers, Policyholders, part of a mutual fund distribution that is interest on U.S. Students, Transferors, or Winners on Treasury obligations; (b) accrued interest expense on the Certain Forms) securities and the gain/loss on the sale of securities. If you are required to file Forms 1099, 1098, 5498, or W-2G, you must also furnish statements to recipients containing the information furnished to the IRS and, in some cases, additional information. Be sure that the statements you provide to recipients are clear and legible. -9- summary) that you are permitted to enclose in a statement mailing may include information similar to the following: (a) the purchase of a debt obligation; and (c) the cost or other basis of No additional enclosures, such as advertising, promotional material, or a quarterly or annual report, are permitted. Even a sentence or two on the year-end statement describing new services offered by the payer is not permitted. Logos are permitted on the envelope and on any nontax enclosures. See

10 Notice which is available on page 8 of Internal Revenue 1099-G, 1099-H, 1099-LTC, 1099-MISC, 1099-Q, 1099-R, Bulletin at SA, 5498, 5498-ESA, 5498-SA, W-2G, 1099-DIV only for section 404(k) dividends reportable under section 6047, Until further guidance is issued regarding the use of TIP 1099-INT only for interest reportable in the course of your trade certain logos and identifying slogans on substitute or business under section 6041, or 1099-S only for royalties returns that are subject to the statement mailing need not be, but can be, a copy of the official paper form filed requirements, the IRS will not assess penalties for the use of a with the IRS. If you do not use a copy of the paper form, the logo (including the name of the payer in any typeface, font, or form number and title of your substitute must be the same as stylized fashion and/or a symbolic icon) or slogan on a the official IRS form. All information required to be reported statement to a recipient if the logo or slogan is used by the must be numbered and titled on your substitute in substantially payer in the ordinary course of its trade or business. In addition, the same manner as on the official IRS form. However, if you use of the logo or slogan must not make it less likely that a are reporting a payment as Other income in box 3 of Form reasonable payee will recognize the importance of the 1099-MISC, you may substitute appropriate explanatory statement for tax reporting purposes. language for the box title. For example, for payments of A recipient statement may be perforated to a check or to a accrued wages to a beneficiary of a deceased employee statement of the recipient s specific account. The check or required to be reported on Form 1099-MISC, you might change account statement to which the recipient statement is the title of box 3 to Beneficiary payments or something similar. perforated must contain, in bold and conspicuous type, the legend Important Tax Return Document Attached. Appropriate instructions to the recipient, similar to those on the official IRS form, must be provided to aid in the proper The legend Important Tax Return Document Enclosed reporting of the items on the recipient s income tax return. For must appear in a bold and conspicuous manner on the outside payments reported on Form 1099-B, rather than furnish of the envelope and on each letter explaining why no check is appropriate instructions with each Form 1099-B statement, enclosed, or on each check or account statement that is not you may furnish to the recipient one set of instructions for all perforated to the recipient statement. The legend is not required statements required to be furnished to a recipient in a on any tax form, tax statement, or permitted letter of tax calendar year. consequences included in a statement mailing. Further, you need not pluralize the word document in the legend simply Except for royalties reported on Form 1099-MISC, the because more than one recipient statement is enclosed. statement mailing requirements explained earlier do not apply to statements to recipients for information reported on the forms TIP If you provide recipient statements in a separate mailing that contains only recipient statements, Forms listed under Other information above. You may combine the statements with other reports or financial or commercial notices, W-8 and W-9, and a letter explaining the tax or expand them to include other information of interest to the consequences of the information shown on a recipient recipient. Be sure that all copies of the forms are legible. See statement included in the envelope, you are not required to Pub for certain composite statements that are include the legend Important Tax Return Document Enclosed permitted. on the envelope. When to furnish forms or statements. Generally, you must Substitute forms. You may furnish to the recipient Copy B furnish Forms 1098, 1099, and W-2G information by February of the official IRS form, or you may use substitute Forms 2, However, you may issue them earlier in some 1099-DIV, 1099-INT, 1099-OID, or 1099-PATR, if they contain situations, as provided by the regulations. For example, you the same language as the official IRS forms and they comply may furnish Form 1099-INT to the recipient on redemption of with the rules in Pub. 1179, relating to substitute Forms U.S. Savings Bonds at the time of redemption. Brokers and Applicable box titles and numbers must be clearly identified, barter exchanges may furnish Form 1099-B anytime but not using the same wording and numbering as the official IRS form. later than February 2, For information on substitute Forms 1099-MISC, see Other Donee organizations required to issue Form 1098-C must information below. For Forms 1099-S, see Real estate furnish the acknowledgment to a donor within 30 days of the transactions below. sale of the vehicle (if it is sold without material improvements or All substitute statements to recipients must contain the significant intervening use) or within 30 days of the contribution. TIP tax year, form number, and form name prominently Trustees or issuers of traditional IRAs must furnish displayed together in one area of the statement. For participants with a statement of the value of the participant s example, they could be shown in the upper right part of the account, and RMD if applicable, by February 2, The fair statement. market value of SEP IRAs must also be furnished to the If you are using substitutes, the IRS encourages you to use participant by February 2, Traditional IRA, Roth IRA, boxes so that the substitute has the appearance of a form. The SEP, or SIMPLE contribution information must be furnished to substitute form must contain the applicable instructions as on the participant by June 1, However, Coverdell ESA the front and back of Copy B (in the case of Form 1099-R, contribution information must be furnished to the beneficiary by Copies B, C, and 2) of the official IRS form. See Pub for April 30, additional requirements and certain composite statements that are permitted. Trustees of a SIMPLE must furnish a statement of the account balance and the account activity by February 2, Real estate transactions. You must furnish a statement to the Trustees and middlemen of a WHFIT must furnish the transferor containing the same information reported to the IRS required statement by March 16, on Form 1099-S. You may use Copy B of the official IRS Form For real estate transactions, you may furnish the statement 1099-S or a substitute form that complies with Pub and to the transferor at closing or by mail on or before February 2, Regulations section (m). You may use a Uniform Settlement Statement (under RESPA) as the written statement if it is conformed by including on the statement the legend Filers of Form 1099-G who report state or local income tax shown on Form 1099-S and by designating which information is refunds, credits, or offsets must furnish the statements to reported to the IRS on Form 1099-S. You may furnish the recipients during January statement to the transferor in person, by mail, or electronically. See the Guide to Information Returns on pages 17 and 18 Furnish the statement at or after closing but by January 31 of for the date other information returns are due to the recipient. the following year. You will meet the requirement to furnish the statement if it is The statement mailing requirements explained above do not properly addressed and mailed, or posted to a website, on or apply to statements to transferors for proceeds from real estate before the due date. If the regular due date falls on a Saturday, transactions reported on Form 1099-S. However, the statement Sunday, or legal holiday, the due date is the next business day. mailing requirements do apply to statements to transferors for A business day is any day that is not a Saturday, Sunday, or timber royalties reportable under section 6050N on legal holiday. Form 1099-S. Electronic recipient statements. If you are required to Other information. Statements to recipients for Forms 1098, furnish a written statement (Copy B or an acceptable substitute) 1098-C, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-CAP, to a recipient, then you may furnish the statement electronically -10-

11 instead of on paper. This includes furnishing the statement to (including broker and barter exchange transactions, reportable recipients of Forms 1098, 1098-E, 1098-T, 1099-A, B, C, CAP, gross proceeds paid to attorneys, and certain payments made DIV, H, INT, G, LTC, MISC, OID, PATR, Q, R, S, SA, 5498, by fishing boat operators) may be subject to backup withholding 5498-ESA, and 5498-SA. It also includes Form W-2G (except at a 28% rate. To be subject to backup withholding, a payment for horse and dog racing, jai alai, sweepstakes, wagering pools, must be a reportable interest (including tax-exempt interest and and lotteries). exempt-interest dividends) or a dividend payment under section! 6049(a), 6042(a), or 6044 (if the patronage dividend is paid in Until further guidance is issued to the contrary, Form money or qualified check), or an other reportable payment 1098-C may not be furnished electronically. under section 6041, 6041A(a), 6045, 6050A, or 6050N. If the CAUTION payment is one of these reportable payments, backup If you meet the requirements listed below, you are treated as withholding will apply if: furnishing the statement timely. 1. The payee fails to furnish his or her taxpayer Consent. The recipient must consent in the affirmative and identification number (TIN) to you, not have withdrawn the consent before the statement is 2. For interest, dividend, and broker and barter exchange furnished. The consent by the recipient must be made accounts opened or instruments acquired after 1983, the payee electronically in a way that shows that he or she can access the fails to certify, under penalties of perjury, that the TIN provided statement in the electronic format in which it will be furnished. is correct, 3. The IRS notifies you to impose backup withholding You must notify the recipient of any hardware or software because the payee furnished an incorrect TIN ( B notice), changes prior to furnishing the statement. A new consent to 4. For interest and dividend accounts or instruments, you receive the statement electronically is required after the new are notified that the payee is subject to backup withholding hardware or software is put into service. (under section 3406(a)(1)(C)), or Prior to furnishing the statements electronically, you must 5. For interest and dividend accounts opened or instruments provide the recipient a statement with the following statements acquired after 1983, the payee fails to certify to you, under prominently displayed. penalties of perjury, that he or she is not subject to backup If the recipient does not consent to receive the statement withholding under 4 above. electronically, a paper copy will be provided. The scope and duration of the consent. For example, Except as explained in 2 above, reportable other payments whether the consent applies to every year the statement is are subject to backup withholding only if 1 or 3 above applies. furnished or only for the January 31 immediately following the date of the consent. If you do not collect and pay over backup withholding How to obtain a paper copy after giving consent.! from affected payees as required, you may become CAUTION How to withdraw the consent. The consent may be withdrawn liable for any uncollected amount. at any time by furnishing the withdrawal in writing (electronically Some payees are exempt from backup withholding. For a list or on paper) to the person whose name appears on the of exempt payees and other information, see Form W-9 and the statement. Confirmation of the withdrawal also will be in writing separate Instructions for the Requester of Form W-9. (electronically or on paper). Notice of termination. The notice must state under what Examples of payments to which backup withholding does not conditions the statements will no longer be furnished to the apply include but are not limited to: recipient. Wages. Procedures to update the recipient s information. Distributions from a pension, annuity, profit-sharing or stock A description of the hardware and software required to bonus plan, any IRA, an owner-employee plan, or other access, print, and retain a statement, and a date the statement deferred compensation plan. will no longer be available on the website. Distributions from a medical or health savings account and Format, posting, and notification. Additionally, you must: long-term care benefits. Ensure the electronic format contains all the required Certain surrenders of life insurance contracts. information and complies with the applicable revenue procedure Distribution from qualified tuition programs or Coverdell for substitute statements to recipients in Pub ESAs. Post, on or before the January 31 due date, the applicable Gambling winnings if regular gambling winnings withholding statement on a website accessible to the recipient through is required under section 3402(q). However, if regular gambling October 15 of that year. winnings withholding is not required under section 3402(q), Inform the recipient, electronically or by mail, of the posting backup withholding applies if the payee fails to furnish a TIN. and how to access and print the statement. Real estate transactions reportable under section 6045(e). Cancelled debts reportable under section 6050P. For more information, see Regulations section Fish purchases for cash reportable under section 6050R. For electronic furnishing of Forms 1098-E and 1098-T, see Certain payment card transactions by a qualified payment Regulations section S-2. For electronic furnishing of card agent. Forms 1099-R, 1099-SA, 1099-Q, 5498, 5498-ESA, and 5498-SA, see Notice on page 433 of Internal Revenue At the time these instructions went to print, the IRS had Bulletin at published proposed Regulations section (g)-1(f) CAUTION Extension. You may request an extension of time to provide regarding rules for certain payment card transactions. A the statements to recipients by sending a letter to Enterprise proposed revenue procedure was also issued as Notice Computing Center Martinsburg, Information Reporting on page 135 of Internal Revenue Bulletin at Program, Attn: Extension of Time Coordinator, 240 Murall For more information, go Drive, Kearneysville, WV The letter must include (a) to and enter keyword QPCA in the upper your name, (b) your TIN, (c) your address, (d) type of return, (e) right corner. a statement that your extension request is for providing When to apply backup withholding. Generally, the period for statements to recipients, (f) reason for delay, and (g) the which the 28% should be withheld is as follows. signature of the payer or authorized agent. Your request must 1. Failure to furnish TIN in the manner required. be postmarked by the date on which the statements are due to Withhold on payments made until the TIN is furnished in the the recipients. If your request for an extension is approved, manner required. Special backup withholding rules may apply if generally you will be granted a maximum of 30 extra days to the payee has applied for a TIN. The payee may certify to this furnish the recipient statements. on Form W-9 by noting Applied For in the TIN block and by signing the form. This form then becomes an awaiting-tin certificate, and the payee has 60 days to obtain a TIN and N. Backup Withholding furnish it to you. If you do not receive a TIN from the payee Interest (including tax-exempt interest and exempt-interest dividends), dividends, rents, royalties, commissions, nonemployee compensation, and certain other payments -11- within 60 days and you have not already begun backup withholding, begin backup withholding and continue until the TIN is provided.

12 The 60-day exemption from backup withholding applies! only to interest and dividend payments and certain CAUTION payments made with respect to readily tradable instruments. Therefore, any other payment, such as nonemployee compensation, is subject to backup withholding even if the payee has applied for and is awaiting a TIN. For information about whether backup withholding applies during the 60-day period, see Regulations section (g)-3. Additional information. For more information about backup withholding, see Pub. 1281, Backup Withholding for Missing and Incorrect Name/TIN(s). O. Penalties The following penalties generally apply to the person required to file information returns. The penalties apply to paper filers as 2. Notice from the IRS that payee s TIN is incorrect ( B well as to electronic filers. notice). You may choose to withhold on any reportable payment made to the account(s) subject to backup withholding For information on the penalty for failure to file after receipt of the B notice, but you must withhold on any TIP electronically, see Penalty on page 6. reportable payment made to the account more than 30 business days after you received the B notice. Stop withholding within 30 days after you receive a certified Form Failure To File Correct Information Returns by W-9 (or other form that requires the payee to certify under the Due Date (Section 6721) penalty of perjury). If you fail to file a correct information return by the due date and you cannot show reasonable cause, you may be subject to a The IRS will furnish a notice to you, and you are penalty. The penalty applies if you fail to file timely, you fail to TIP required to promptly furnish a copy of such notice, or an include all information required to be shown on a return, or you acceptable substitute, to the payee. For further include incorrect information on a return. The penalty also information, see Regulations section (d)-5 and applies if you file on paper when you were required to file Pub electronically, you report an incorrect TIN or fail to report a TIN, If you receive two incorrect TIN notices within 3 years for the or you fail to file paper forms that are machine readable. same account, follow the procedures in Regulations section The amount of the penalty is based on when you file the (d)-5(g) and Pub correct information return. The penalty is: 3. Notice from the IRS that payee is subject to backup $15 per information return if you correctly file within 30 days withholding due to notified payee underreporting. You may (by March 30 if the due date is February 28); maximum choose to withhold on any reportable payment made to the penalty $75,000 per year ($25,000 for small businesses, account(s) subject to backup withholding after receipt of the defined below). notice, but you must withhold on any reportable payment made $30 per information return if you correctly file more than 30 to the account more than 30 business days after you receive days after the due date but by August 1; maximum penalty the notice. The IRS will notify you in writing when to stop $150,000 per year ($50,000 for small businesses). withholding, or the payee may furnish you a written certification $50 per information return if you file after August 1 or you do from the IRS stating when the withholding should stop. In most not file required information returns; maximum penalty cases, the stop date will be January 1 of the year following the $250,000 per year ($100,000 for small businesses). year of the notice. You must notify the payee when withholding under this TIP procedure starts. For further information, see Regulations section (c)-1(d). 4. Payee failure to certify that he or she is not subject to backup withholding. Withhold on reportable interest and dividends until the certification has been received. For exceptions to these general timing rules, see section 3406(e). For special rules on backup withholding on gambling TIP winnings, see the separate Instructions for Forms W-2G and Reporting backup withholding. Report backup withholding on Form 945, Annual Return of Withheld Federal Income Tax. Also, report backup withholding and the amount of the payment on Forms W-2G, 1099-B, DIV, G, INT, MISC, OID, or PATR even if the amount of the payment is less than the amount for which an information return is normally required. Form 945. Report backup withholding, voluntary withholding on certain government payments, and withholding from gambling winnings, pensions, annuities, IRAs, military retirement, and Indian gaming profits on Form 945. Generally, file Form 945 for 2008 by February 2, For more information, including the deposit requirements for Form 945, see the separate Instructions for Form 945 and Circular E, Employer s Tax Guide (Pub. 15). Do not report on Form 945 any income tax withholding reported on the following forms. Form W-2 including withholding on distributions to plan participants from nonqualified plans that must be reported on Form 941, Employer s Quarterly Federal Tax Return. Form 1042-S must be reported on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. Pub. 515 has more information on Form 1042 reporting, TIP partnership withholding on effectively connected income, and dispositions of U.S. real property interests by a foreign person. -12-! CAUTION If you do not file corrections and you do not meet any of the exceptions to the penalty described on page 6, the penalty is $50 per information return. Small businesses lower maximum penalties. You are a small business if your average annual gross receipts for the 3 most recent tax years (or for the period you were in existence, if shorter) ending before the calendar year in which the information returns were due are $5 million or less. Exceptions to the penalty. The following are exceptions to the failure to file penalty. 1. The penalty will not apply to any failure that you can show was due to reasonable cause and not to willful neglect. In general, you must be able to show that your failure was due to an event beyond your control or due to significant mitigating factors. You must also be able to show that you acted in a responsible manner and took steps to avoid the failure. 2. An inconsequential error or omission is not considered a failure to include correct information. An inconsequential error or omission does not prevent or hinder the IRS from processing the return, from correlating the information required to be shown on the return with the information shown on the payee s tax return, or from otherwise putting the return to its intended use. Errors and omissions that are never inconsequential are those related to (a) a TIN, (b) a payee s surname, and (c) any money amount. 3. De minimus rule for corrections. Even though you cannot show reasonable cause, the penalty for failure to file correct information returns will not apply to a certain number of returns if you: a. Filed those information returns, b. Either failed to include all the information required on a return or included incorrect information, and c. Filed corrections by August 1. If you meet all the conditions in a, b, and c above, the penalty for filing incorrect returns (but not for filing late) will not apply to the greater of 10 information returns or 1 /2 of 1% of the total number of information returns you are required to file for the calendar year. Intentional disregard of filing requirements. If any failure to file a correct information return is due to intentional disregard of

13 the filing or correct information requirements, the penalty is at Substitute payments in lieu of dividends and tax-exempt least $100 per information return with no maximum penalty. interest (Form 1099-MISC), Acquisitions or abandonments of secured property (Form Failure To Furnish Correct Payee Statements 1099-A), (Section 6722) Cancellation of debt (Form 1099-C), If you fail to provide correct payee statements and you cannot Payments of attorneys fees and gross proceeds paid to show reasonable cause, you may be subject to a penalty. The attorneys (Form 1099-MISC), penalty applies if you fail to provide the statement by January Fish purchases for cash (Form 1099-MISC), 31 (see part M on page 9), you fail to include all information The credits for clean renewable energy bonds and for Gulf required to be shown on the statement, or you include incorrect tax credit bonds treated as interest and reported on Form information on the statement. Payee statement has the same 1099-INT, and meaning as statement to recipient as used in part M on Federal executive agency payments for services (Form page MISC). For additional reporting requirements, see Rev. The penalty is $50 per statement, no matter when the Rul on page 1115 of Internal Revenue Bulletin correct statement is furnished, with a maximum of $100,000 per at year. The penalty is not reduced for furnishing a correct Reporting generally is required for all payments to statement by August 1. partnerships. For example, payments of $600 or more made in Exception. An inconsequential error or omission is not the course of your trade or business to an architectural firm that considered a failure to include correct information. An is a partnership are reportable on Form 1099-MISC. However, inconsequential error or omission cannot reasonably be see Regulations section (c)(1)(ii)(A). expected to prevent or hinder the payee from timely receiving correct information and reporting it on his or her income tax return or from otherwise putting the statement to its intended Q. Earnings on any IRA, Coverdell ESA, use. Errors and omissions that are never inconsequential are Archer MSA, or HSA those relating to (a) a dollar amount, (b) a significant item in a payee s address, (c) the appropriate form for the information Generally, income earned in any IRA, Coverdell ESA, Archer provided (that is, whether the form is an acceptable substitute MSA, or HSA, such as interest or dividends, is not reported on for the official IRS form), and (d) whether the statement was Forms However, distributions must be reported on Form furnished in person or by statement mailing, when required R, 1099-Q, or 1099-SA. Intentional disregard of payee statement requirements. If any failure to provide a correct payee statement is due to intentional disregard of the requirements to furnish a correct R. Certain Grantor Trusts payee statement, the penalty is at least $100 per payee Certain grantor trusts (other than WHFITs) may choose to file statement with no maximum penalty. Forms 1099 rather than a separate statement attached to Form 1041, U.S. Income Tax Return for Estates and Trusts. If you Forms 1099-Q, 1099-SA, 5498, 5498-ESA, and have filed Form 1041 for a grantor trust in the past and you 5498-SA (Section 6693) want to choose the Form 1099 filing method for 2008, you must The penalties under sections 6721 and 6722 do not apply to: have filed a final Form 1041 for To change reporting method, see Regulations section (g) and the Forms Filed Under Code Section Instructions for Form 1041 and Schedules A, B, D, G, I, J, and K SA and 5498-SA 220(h) and 223(h) For more information on WHFITs, see Widely held fixed (i) and 408(l) investment trusts (WHFITs) beginning on page ESA 530(h) 1099-Q 529(d) and 530(h) S. Special Rules for Reporting Payments Made Through Foreign Intermediaries The penalty for failure to timely file Forms 1099-SA, 5498-SA, 5498, 5498-ESA, or 1099-Q is $50 per return with no and Foreign Flow-Through Entities on maximum, unless the failure is due to reasonable cause. See Form 1099 section If you are the payer and have received a Form W-8IMY, Fraudulent Acknowledgments With Respect to Certificate of Foreign Intermediary, Foreign Flow-Through Donations of Motor Vehicles, Boats, and Entity, or Certain U.S. Branches for United States Tax Airplanes (Section 6720) Withholding, from a foreign intermediary or flow-through entity, If you are required under section 170(f)(12)(A) to furnish a contemporaneous written acknowledgment to a donor and you knowingly furnish a false or fraudulent Form 1098-C, or knowingly fail to furnish a Form 1098-C within the applicable 30-day period, you may be subject to a penalty. See the 2008 Instructions for Form 1098-C for more detailed information. Civil Damages for Fraudulent Filing of follow the instructions below for completing Form Definitions of the terms used in these instructions are on page 14. Presumption Rules For additional information including details on the TIP presumption rules, see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and Information Returns (Section 7434) W-8IMY and Pub To order, see How To Get Forms, If you willfully file a fraudulent information return for payments Publications, and Other Assistance on page 15. you claim you made to another person, that person may be able If you are the payer and do not have a Form W-9, to sue you for damages. You may have to pay $5,000 or more. appropriate Form W-8, or other valid documentation, or you cannot allocate a payment to a specific payee, prior to payment, you are required to use certain presumption rules to determine P. Payments to Corporations and the following. Partnerships Generally, payments to corporations are not reportable. However, you must report payments to corporations for the following. Medical and health care payments (Form 1099-MISC), Withheld federal income tax or foreign tax, Barter exchange transactions (Form 1099-B), -13- The status of the payee as a U.S. or foreign person and The classification of the payee as an individual, trust, estate, corporation, or partnership. See Regulations sections (b)(3), (d) and (e), (g)(3)(ii), and (d). Under these presumption rules, if you must presume that the payee is a U.S. nonexempt recipient subject to backup

14 withholding, you must report the payment on a Form Gross proceeds from a sale effected outside the U.S. However, if before filing Form 1099 with the IRS the recipient is See Regulations section (a). documented as foreign, then report the payment on a 3. An NQI or QI that provides another payer all the Form 1042-S. information sufficient for that payer to complete Form 1099 On the other hand, if you must presume that the payee is a reporting. For example, see Regulations section foreign recipient and prior to filing Form 1042-S with the IRS (b)(14). However, if an NQI or QI does not provide you discover that the payee is a U.S. nonexempt recipient sufficient information for another payer to report a payment on based on documentation, then report all payments made to that Form 1099, the intermediary must report the payment. payee during the calendar year on a Form Rules for Reporting Payments Initially Reported If you use the 90-day grace period rule to presume a payee on Form 1042-S is foreign, you must file a Form 1042-S to report all payments subject to withholding during the grace period. If you later If an NQI or QI receives a Form 1042-S made out to an discover that the payee is a U.S. nonexempt recipient subject to unknown recipient and the NQI or QI has actual knowledge backup withholding, you must file a Form 1099 for all that the payee of the income is a U.S. nonexempt recipient, it payments made to that payee after the discovery of the payee s must file a Form 1099 even if the payment has been subject to U.S. status. withholding by another payer. The NQI or QI reports the amount withheld by the other payer on Form 1099 as federal income Rules for Payments Made to U.S. Nonexempt tax withheld. Recipients Through a QI, NQI, or FTE Definitions If you are the payer making a payment through a QI, NQI, or FTE for a U.S. nonexempt recipient on whose behalf the QI, Foreign intermediary. A foreign intermediary is any person NQI, or FTE is acting, use the following rules to complete who is not a U.S. person and acts as a custodian, broker, Form nominee, or otherwise as an agent for another person, regardless of whether that other person is the beneficial owner Known recipient. If you know that a payee is a U.S. of the amount paid, a flow-through entity, or another nonexempt recipient and have the payee s name, address, and intermediary. The intermediary can be a qualified intermediary TIN (if a TIN has been provided), you must complete the Form or a nonqualified intermediary with that information. Also, on the second name line below the recipient s name, enter IMY followed by the name of the Qualified intermediary (QI). A qualified intermediary is a QI, NQI, or FTE. person that is a party to a withholding agreement with the IRS and is: For payments made to multiple recipients: (a) enter the A foreign financial institution or a foreign clearing name of the recipient whose status you relied on to determine organization (other than a U.S. branch or U.S. office of the the applicable rate of withholding and (b) on the second name institution or organization), line, enter IMY followed by the name of the QI, NQI, or FTE. A foreign branch or office of a U.S. financial institution or a However, if the QI has assumed primary Form 1099 reporting foreign branch or office of a U.S. clearing organization, or backup withholding responsibility, you are not required to A foreign corporation for purposes of presenting claims of issue the Form 1099 or to backup withhold. See Qualified benefits under an income tax treaty on behalf of its intermediary (QI) on this page. shareholders, or Unknown recipient. If you cannot reliably associate a Any other person the IRS accepts as a qualified intermediary payment with valid documentation and are required to presume and who enters into a withholding agreement with the IRS. a payee is a U.S. nonexempt recipient: For details on QI agreements, see: 1. File a Form 1099 and enter unknown recipient on the Rev. Proc on page 387 of Internal Revenue Bulletin first name line at 2. On the second name line, enter IMY followed by the Modified by Rev. Proc , Section 4A (Appendix 3), on name of the QI, NQI, or FTE. page 306 of Internal Revenue Bulletin at 3. Enter the EIN of the QI, NQI, or FTE, if applicable, in the pub/irs-irbs/irb03-32.pdf; recipient s identification number box. Further modified by Rev. Proc on page 702 of 4. Furnish a copy of the Form 1099 with unknown recipient Internal Revenue Bulletin at to the QI, NQI, or FTE who is acting on the recipient s behalf. irb04-14.pdf; and Also see Rev. Proc which amends the final A payer that is required to report payments made to a withholding partnership and withholding foreign trust! U.S. nonexempt recipient account holder but does not agreements by expanding the availability of simplified CAUTION receive the necessary allocation information cannot documentation, reporting, and withholding procedures, further report those payments on a pro rata basis. Report unallocated modifying Rev. Proc Rev. Proc is available payments using the presumption rules above. on page 1176 of Internal Revenue Bulletin at gov/pub/irs-irbs/irb05-51.pdf. Rules for Non-U.S. Payers Generally, a branch of a financial institution may not Non-U.S. payers (foreign persons that are not U.S. payers) operate as a QI after December 31, 2006, in a country generally have the same reporting obligations as U.S. payers. A! CAUTION that does not have approved know-your-customer (KYC) U.S. payer is anyone who is: rules. Branches of financial institutions that operate in non-kyc A U.S. person, approved jurisdictions will be required to act as nonqualified Any U.S. governmental agency, intermediaries after December 31, 2006, or after December 31, A controlled foreign corporation (CFC), 2007, if an extension to operate as a QI was approved by the A foreign partnership that has one or more U.S. partners IRS. For additional information, see Notice on page who, in the aggregate, hold more than 50 percent of the gross 708 of Internal Revenue Bulletin at income derived from the conduct of a U.S. trade or business, irs-irbs/irb06-14.pdf. A foreign person who owns 50 percent or more of the gross income that is effectively connected with a U.S. trade or Nonqualified intermediary (NQI). A nonqualified business, or intermediary is any intermediary that is not a U.S. person and A U.S. branch of a foreign bank or a foreign insurance that is not a qualified intermediary. company. Foreign flow-through entity (FTE). A flow-through entity is a For more information, see Regulations section foreign partnership (other than a withholding foreign (c)(5). partnership), a foreign simple trust or foreign grantor trust (other than a withholding foreign trust), or, for payments for which a Exceptions. The following payments are not subject to reduced rate of withholding is claimed under an income tax reporting by a non-u.s. payer. treaty, any entity to the extent the entity is considered to be 1. A foreign source reportable payment paid outside the fiscally transparent under section 894 with respect to the U.S. For example, see Regulations section (b)(6). payment by an interest holder s jurisdiction. -14-

15 Withholding foreign partnership or withholding foreign How To Get Forms, Publications, and Other trust. A withholding foreign partnership or withholding foreign Assistance trust is a foreign partnership or a foreign simple or grantor trust that has entered into a withholding agreement with the IRS in Because the IRS processes paper forms by machine which it agrees to assume primary withholding responsibility for (optical character recognition equipment), you cannot all payments that are made to it for its partners, beneficiaries, or! CAUTION file with the IRS Form 1096 or Copy A of Forms 1098, owners. See Rev. Proc as amended by Rev. Proc. 1099, or 5498 that you print from the IRS website or the CD , for procedures for entering into a withholding foreign partnership or trust agreement. Free Tax Services Nonwithholding foreign partnership, simple trust, or To find out what services are available, get Publication 910, IRS grantor trust. A nonwithholding foreign partnership is any Guide to Free Tax Services. It contains a list of free tax foreign partnership other than a withholding foreign partnership. publications and describes other free tax information services, A nonwithholding foreign simple trust is any foreign simple trust including tax education and assistance programs and a list of that is not a withholding foreign trust. A nonwithholding foreign TeleTax topics. grantor trust is any foreign grantor trust that is not a withholding foreign trust. Accessible versions of IRS published products are available on request in a variety of alternative formats for people with Fiscally transparent entity. An entity is treated as fiscally disabilities. transparent with respect to an item of income to the extent that the interest holders in the entity must, on a current basis, take Mail. You can send your order for forms, instructions, and into account separately their shares of an item of income paid publications to the address below. You should receive a to the entity, whether or not distributed, and must determine the response within 10 days after your request is received. character of the items of income as if they were realized directly from the sources from which they were realized by the entity. National Distribution Center For example, partnerships, common trust funds, and simple P.O. Box 8903 trusts or grantor trusts are generally considered to be fiscally Bloomington, IL transparent with respect to items of income received by them. Internet. You can access the IRS website 24 hours a day, 7 days a week, at to: T. How To Get Tax Help Access commercial tax preparation and e-file services. Download forms, instructions, and publications. Information Reporting Customer Service Site Order IRS products online. If you have questions about reporting on Forms 1096, 1098, Research your tax question online. 1099, 5498, W-2, W-2G, and W-3, you may call a toll-free Search publications online by topic or keyword. number, You may still use the original View Internal Revenue Bulletins (IRBs) published in the last telephone number, (not toll free). For TTY/TDD few years. equipment, call (not toll free). The hours of Sign up to receive local and national tax news by . operation for the call site are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern time. CD/DVD for Tax Products. You can order Publication 1796, IRS Federal Tax Products CD/DVD, and obtain: Other tax-related matters. For other tax information related to Current-year forms, instructions, and publications. business returns or accounts, call Prior-year forms, instructions, and publications. 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You should to your local taxpayer advocate, whose phone number and receive your order within 10 days. address are listed in your local telephone directory and in TTY/TDD equipment. If you have access to TTY/TDD Publication 1546, Taxpayer Advocate Service Your Voice at equipment, call to ask tax questions or to order the IRS. You can file Form 911, Request for Taxpayer Advocate forms and publications. Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. Evaluating the quality of our telephone services. To For more information, go to ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the Taxpayer Advocacy Panel (TAP). The TAP listens to quality of our telephone services. One method is for a second taxpayers, identifies taxpayer issues, and makes suggestions IRS representative to listen in on or record random telephone for improving IRS services and customer satisfaction. If you calls. Another is to ask some callers to complete a short survey have suggestions for improvements, contact the TAP, toll free at the end of the call. at or go to

16 Privacy Act and Paperwork Reduction Act Notice. We ask 1098-C minutes for the information on these forms to carry out the Internal 1098-E... 7 minutes Revenue laws of the United States. You are required to give us 1098-T minutes the information. We need it to figure and collect the right 1099-A... 9 minutes 1099-B minutes amount of tax C minutes Sections 170(f)(12),199, 220(h), 223, 408, 408A, 529, 530, 1099-CAP* minutes 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 1099-DIV minutes 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, 6050P, 6050Q, 1099-G minutes 6050R, 6050S, 6050T, and their regulations require you to file 1099-H minutes an information return with the IRS and furnish a statement to 1099-INT minutes recipients. Section 6109 and its regulations require you to 1099-LTC minutes provide your taxpayer identification number on what you file MISC minutes 1099-OID minutes Routine uses of this information include giving it to the 1099-PATR minutes Department of Justice for civil and criminal litigation, and to 1099-Q minutes cities, states, and the District of Columbia for use in 1099-R minutes administering their tax laws. We may also disclose this 1099-S... 8 minutes information to other countries under a tax treaty, to federal and 1099-SA... 8 minutes state agencies to enforce federal nontax criminal laws, or to minutes federal law enforcement and intelligence agencies to combat 5498-ESA... 7 minutes terrorism. If you fail to provide this information in a timely 5498-SA minutes manner, you may be subject to penalties. W-2G minutes You are not required to provide the information requested on * Privacy Act does not pertain to this form. a form that is subject to the Paperwork Reduction Act unless If you have comments concerning the accuracy of these time the form displays a valid OMB control number. Books or estimates or suggestions for making these forms simpler, we records relating to a form or its instructions must be retained as would be happy to hear from you. You can write to the Internal long as their contents may become material in the Revenue Service, Tax Products Coordinating Committee, administration of any Internal Revenue law. Generally, tax SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, returns and return information are confidential, as required by Washington, DC Do not send these forms to this section address. Instead, see part D on page 4. The time needed to complete and file the following forms will vary depending on individual circumstances. The estimated average times are: minutes minutes -16-

17 Guide to Information Returns (If any date shown falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.) Due Date To Recipient Form Title What to Report Amounts to Report To IRS (unless indicated otherwise) 1042-S Foreign Person s Income such as interest, dividends, royalties, pensions and annuities, etc., U.S. Source Income and amounts withheld under Chapter 3. Also, distributions of effectively See form instructions March 15 March 15 Subject to connected income by publicly traded partnerships or nominees. Withholding 1098 Mortgage Interest Mortgage interest (including points) and certain mortgage insurance premiums (To Payer/ Statement you received in the course of your trade or business from individuals and $600 or more February 28* Borrower) reimbursements of overpaid interest. January 31 (To Donor) 1098-C Contributions of Information regarding a donated motor vehicle, boat, or airplane. Gross proceeds of more 30 days from date Motor Vehicles, February 28* than $500 of sale or Boats, and Airplanes contribution 1098-E Student Loan Interest Student loan interest received in the course of your trade or business. $600 or more February 28* January 31 Statement 1098-T Tuition Statement Qualified tuition and related expenses, reimbursements or refunds, and See instructions February 28* January 31 scholarships or grants (optional) A Acquisition or Information about the acquisition or abandonment of property that is security (To Borrower) Abandonment of for a debt for which you are the lender. All amounts February 28* January 31 Secured Property 1099-B Proceeds From Sales or redemptions of securities, futures transactions, commodities, and Broker and Barter barter exchange transactions. All amounts February 28* January 31** Exchange Transactions 1099-C Cancellation of Debt Cancellation of a debt owed to a financial institution, the Federal Government, a credit union, RTC, FDIC, NCUA, a military department, the U.S. Postal $600 or more February 28* January 31 Service, the Postal Rate Commission, or any organization having a significant trade or business of lending money CAP Changes in Information about cash, stock, or other property from an acquisition of control Amounts of stock or (To Shareholders) Corporate Control or the substantial change in capital structure of a corporation. property valued at $100 February 28* January 31 and Capital Structure million or more $10 or more, except 1099-DIV Dividends and Distributions, such as dividends, capital gain distributions, or nontaxable $600 or more for February 28* January 31** Distributions distributions, that were paid on stock and liquidation distributions. liquidations February 28* January H Health Coverage Tax Health insurance premiums paid on behalf of certain individuals. Credit (HCTC) All amounts February 28* January 31 Advance Payments $10 or more ($600 or 1099-INT Interest Income Interest income. February 28* January 31** more in some cases) 1099-LTC Long-Term Care and Payments under a long-term care insurance contract and accelerated death Accelerated Death benefits paid under a life insurance contract or by a viatical settlement All amounts February 28* January 31 Benefits provider MISC Miscellaneous Rent or royalty payments; prizes and awards that are not for services, such as $600 or more, except Income winnings on TV or radio shows. $10 or more for royalties (Also, use to report Payments to crew members by owners or operators of fishing boats including direct sales of $5,000 payments of proceeds from sale of catch. All amounts or more of consumer goods for resale.) All amounts Section 409A deferrals and income from nonqualified deferred compensation ($600 or more if plans. deferrals) Payments to a physician, physicians corporation, or other supplier of health and medical services. Issued mainly by medical assistance programs or $600 or more February 28* January 31** health and accident insurance plans. Payments for services performed for a trade or business by people not treated as its employees. Examples: fees to subcontractors or directors and golden $600 or more parachute payments. Fish purchases paid in cash for resale. $600 or more Substitute dividends and tax-exempt interest payments reportable by brokers. $10 or more Crop insurance proceeds. $600 or more Gross proceeds paid to attorneys. $600 or more $10 or more February 28* January 31** 1099-PATR Taxable Distributions Distributions from cooperatives passed through to their patrons including any Received From domestic production activities deduction and certain pass-through credits. $10 or more February 28* January 31 Cooperatives 1099-G 1099-OID Certain Government Original Issue Unemployment compensation, state and local income tax refunds, agricultural Original issue discount. $10 or more for refunds Payments Discount payments, and taxable grants. and unemployment *The due date is March 31 if filed electronically. **The due date is March 15 for reporting by trustees and middlemen of WHFITs. -17-

18 Guide to Information Returns (Continued) Due Date To Recipient Form Title What to Report Amounts to Report To IRS (unless indicated otherwise) 1099-Q Payments From Earnings from qualified tuition programs and Coverdell ESAs. Qualified Education All amounts February 28* January 31 Programs (Under Sections 529 and 530) 1099-R Distributions From Distributions from retirement or profit-sharing plans, any IRA, insurance Pensions, Annuities, contracts, and IRA recharacterizations. Retirement or $10 or more February 28* January 31 Profit-Sharing Plans, IRAs, Insurance Contracts, etc S Proceeds From Real Gross proceeds from the sale or exchange of real estate and certain Generally, $600 or more February 28* January 31 Estate Transactions royalty payments SA Distributions From an Distributions from an HSA, Archer MSA, or Medicare Advantage MSA. HSA, Archer MSA, or All amounts February 28* January 31 Medicare Advantage MSA 5471 Information Return of U.S. persons who are officers, directors, or shareholders in certain foreign U.S. Person With corporations report information as required by sections 6038 and Due date of income See form instructions None Respect To Certain tax return Foreign Corporations 5472 Information Return of a Reportable transactions that occur during the tax year of a reporting 25% Foreign-Owned corporation with a foreign or domestic related party. U.S. Corporation or a Due date of income See form instructions None Foreign Corporation tax return Engaged in a U.S. Trade or Business (To Participant) 5498 IRA Contribution Contributions (including rollover contributions) to any individual retirement For FMV/RMD Information arrangement (IRA) including a SEP, SIMPLE, and Roth IRA; Roth All amounts May 31 Jan 31; conversions; IRA recharacterizations; and the fair market value (FMV) of For contributions, the account. May ESA Coverdell ESA Contributions (including rollover contributions) to a Coverdell ESA. Contribution All amounts May 31 April 30 Information 5498-SA HSA, Archer MSA, or Contributions to an HSA (including transfers and rollovers) or Archer MSA (To Participant) Medicare Advantage and the fair market value of an HSA, Archer MSA, or Medicare Advantage All amounts May 31 May 31 MSA Information MSA Employer s Annual Receipts from large food or beverage operations, tips reported by Allocated tips are Information Return of employees, and allocated tips. See separate Last day of shown on Form W-2, Tip Income and instructions February* due January 31 Allocated Tips 8300 (IRS/ Report of Cash Payments in cash (including certain monetary instruments) or foreign FinCen Payments Over currency received in one transaction, or two or more related transactions, form) $10,000 Received in a in the course of a trade or business. Does not apply to banks and financial 15 days after date (To Payer) Over $10,000 Trade or Business institutions filing FinCen Form 104, and casinos that are required to report of transaction January 31 such transactions on FinCen Form 103 or, generally, to transactions outside the United States Report of a Sale or Sale or exchange of a partnership interest involving unrealized receivables Generally, attach to (To Transferor and Exchange of Certain or inventory items under section 751(a). (Transaction only) Form 1065 or Transferee) Partnership Interests 1065-B January 31 Generally, $600 or more; W-2G Certain Gambling Gambling winnings from horse racing, dog racing, jai alai, lotteries, keno, $1,200 or more from Winnings bingo, slot machines, sweepstakes, wagering pools, poker tournaments, bingo or slot machines; February 28* January 31 etc. $1,500 or more from keno 104 Currency Transaction Each deposit, withdrawal, exchange of currency, or other payment or 15 days after date (FinCen Report transfer by, through, or to financial institutions (other than casinos) or the Over $10,000 Not required of transaction form) U.S. Postal Service. 926 Return by a U.S. Certain transfers of tangible and intangible property to a foreign Transferor of Property corporation as required by section 6038B. See form instructions Attach to tax return None to a Foreign Corporation W-2 Wage and Tax Wages, tips, other compensation; social security, Medicare, withheld To SSA To Recipient Statement income taxes; and advance earned income credit (EIC) payments. Include See separate bonuses, vacation allowances, severance pay, certain moving expense instructions payments, some kinds of travel allowances, and third-party payments of Last day of January 31 sick pay. February* TD F Report of Foreign Bank Financial interest in or signature or other authority over a foreign bank To Treasury Dept. To Recipient and Financial Accounts account, securities account, or other financial account. Over $10,000 June 30 None *The due date is March 31 if filed electronically. -18-

19 Types of Payments Below is an alphabetic list of some payments and the forms to file and report them. However, it is not a complete list of all payments, and the absence of a payment from the list does not indicate that the payment is not reportable. For instructions on a specific type of payment, see the separate instructions in the form(s) listed. Type of Payment Report on Form Type of Payment Report on Form Abandonment A Income attributable to domestic production Accelerated death benefits LTC activities, deduction for PATR Acquisition of control CAP Income tax refunds, state and local G Advance earned income credit... W-2 Indian gaming profits paid to tribal members MISC Advance health insurance payments H Interest income INT Agriculture payments G Tax-exempt INT Allocated tips... W-2 Interest, mortgage Alternate TAA payments G IRA contributions Annuities R IRA distributions R Archer MSAs: Life insurance contract distributions R, 1099-LTC Contributions SA Liquidation, distributions in DIV Distributions SA Loans, distribution from pension plan R Attorney, fees and gross proceeds MISC Long-term care benefits LTC Auto reimbursements, employee... W-2 Medicare Advantage MSAs: Auto reimbursements, nonemployee MISC Contributions SA Awards, employee... W-2 Distributions SA Awards, nonemployee MISC Medical services MISC Barter exchange income B Mileage, employee... W-2 Bonuses, employee... W-2 Mileage, nonemployee MISC Bonuses, nonemployee MISC Military retirement R Broker transactions B Mortgage insurance premiums Cancellation of debt C Mortgage interest Capital gain distributions DIV Moving expense... W-2 Car expense, employee... W-2 Nonemployee compensation MISC Car expense, nonemployee MISC Nonqualified deferred compensation: Changes in capital structure CAP Beneficiary R Charitable gift annuities R Employee... W-2 Commissions, employee... W-2 Nonemployee MISC Commissions, nonemployee MISC Original issue discount (OID) OID Commodities transactions B Patronage dividends PATR Compensation, employee... W-2 Pensions R Compensation, nonemployee MISC Points Contributions of motor vehicles, boats, and Prizes, employee... W-2 airplanes C Prizes, nonemployee MISC Cost of current life insurance protection R Profit-sharing plan R Coverdell ESA contributions ESA Punitive damages MISC Coverdell ESA distributions Q Qualified plan distributions R Crop insurance proceeds MISC Qualified tuition program payments Q Damages MISC Real estate transactions S Death benefits R Recharacterized IRA contributions R, 5498 Accelerated LTC Refund, state and local tax G Debt cancellation C Rents MISC Dependent care payments... W-2 Retirement R Direct rollovers Q, 1099-R, Roth conversion IRA contributions Roth conversion IRA distributions R Direct sales of consumer products for resale MISC Roth IRA contributions Directors fees MISC Roth IRA distributions R Discharge of indebtedness C Royalties MISC Dividends DIV Timber, pay-as-cut contract S Donation of motor vehicle C Sales: Education loan interest E Real estate S Employee business expense reimbursement.. W-2 Securities B Employee compensation... W-2 Section 1035 exchange R Excess deferrals, excess contributions, SEP contributions... W-2, 5498 distributions of R SEP distributions R Fees, employee... W-2 Severance pay... W-2 Fees, nonemployee MISC Sick pay... W-2 Fishing boat crew members proceeds MISC SIMPLE contributions... W-2, 5498 Fish purchases for cash MISC SIMPLE distributions R Foreclosures A Student loan interest E Foreign persons income S Substitute payments in lieu of dividends or 401(k) contributions... W-2 tax-exempt interest MISC 404(k) dividend DIV Supplemental unemployment... W-2 Gambling winnings... W-2G Tax refunds, state and local G Golden parachute, employee... W-2 Tips... W-2 Golden parachute, nonemployee MISC Tuition T Grants, taxable G Unemployment benefits G Health care services MISC Vacation allowance, employee... W-2 Health insurance advance payments H Vacation allowance, nonemployee MISC Health savings accounts: Wages... W-2 Contributions SA Distributions SA -19-

20 Index A H Q Account number box... 9 Help Qualified settlement funds... 3 B I S Backup withholding...2, 11, 12 C Information returns, other... 4 K State and local tax departments... 4 Statement mailing requirements... 9, 10 Statements to recipients...2, 9, 10 Corporations, payments to Keeping copies... 5 Substitute forms... 2, 6, 9, 10 Corrected returns, how to file... 6 Successor/predecessor reporting... 3 D L Limited liability company (LLC)...8, 9 T Due dates...4, 5, 10 Logos or substitute statements Taxpayer Advocate Taxpayer identification number... 8, 11 E M Telephone numbers on statements... 9 Electronic reporting... 5 Mailing forms... 5 TIN Matching... 2 Extension to file... 4 Transmitters, paying agents, etc Extension to furnish statements N Names, TINs, etc V F Nominee/middleman... 3 Void returns... 8 Filing returns... 5 FIRE System... 5 O W Foreign intermediaries, payments made Ordering forms What s New... 1 through When to file...4, 5 Foreign person, payment to... 3 P When to furnish statements Form , 5 Paper document reporting... 6 Where to file... 4 Form Partnerships, payments to Who must file...3, 5 Form W Payee statements... 2, 9, 10 Widely held fixed investment trusts... 3 Forms, how to get Payments made through foreign Withholding, backup...2, 11, 12 G intermediaries Penalties... 6, 12 Grantor trusts Private delivery services